Social Return on Investment (SROI) is a methodology used to measure social, economic & environmental value that is generated by business activities. SROI analysis measures value relative to the resources invested, and as such gives an understanding of the wider benefits of investment that may have otherwise been missed.
The rewards of SROI analysis means it is fast gaining momentum in both the public and private sectors. Legislation such as The Public Services (Social Value) Act, which requires the third party and public sectors to consider their social impact in procurement and commissioning of services, is helping to push the concept of social value to the top of the agenda. As a result an increasing number of businesses are beginning to measure their wider impacts & consider ways to enhance them.
Gaining an understanding of social value has a number of advantages, these can include:
- Facilitating activities to ensure maximum benefits are achieved;
- Identifying risks and opportunities that might have otherwise been missed;
- Informing investment opportunities of maximum value;
- Raising a company profile by demonstrating the wider benefits of business activities;
- Attracting quality staff and investment; and
- Making tenders more appealing and persuasive.
As a part of Green Sky Thinking Week held earlier this year in April, Greengage hosted an SROI event entitled ‘The Social & Business Return on Investment for Developments’. The event was well-attended by industry peers from a variety of backgrounds and stimulated good debate both before and after the presentation, reflecting the increasing interest.
During the event the speakers examined the key drivers of SROI, with Lesley Treacy, Associate Partner at Greengage, explaining how the methodology can help a company to establish social value in terms of financial metrics. Such metrics resonate with financial departments and those controlling project purse strings.
The second speaker of the event was Anna Devlet, Head of Community at British land who discussed the Regent’s Place case study. British Land have demonstrated how the SROI of financial investments in Regent’s Place has resulted in wide scale community benefits. The lessons learnt from the Regent’s Place project are now being used on other British Land projects to enhance Social Value. This experience has also informed the foundation of the British Land Community & Supply Chain Charters.
Festus Moffat, Director at John Robertson Architects, discussed the ability of the public realm to add economic, social and environmental value to an area, resulting in improved market attractiveness and ultimately higher rent and capital values.
Awareness around Social Value is growing and so is the importance of being able to demonstrate it in a robust manner. The benefits to organisations and public sector alike are obvious. Companies therefore should be aware of, and understand what financially orientated metrics best quantify their impacts. Expect interest in SROI to increase!
For more information on SROI analysis, download our free SROI guidance presentation resource.